Derek Pilecki on long/short financials investing, regional banks, non-banks and insurance

Derek Pilecki on long/short financials investing, regional banks, non-banks and insurance | S08 E08 – The Acquirers Podcast

Market views

Bullish

BANKS— Small and mid-cap banks are trading below normal valuation ranges (8-9x vs 10-14x normal) with improving M&A environment and deregulation catalysts ahead.
BNP— French bank BNP trading at deep discount to tangible book value with improving ROE trajectory from 8% to 11% and aggressive buyback program.
GS— Societe Generale trading at just 35% of tangible book value with ROE improving from 5% to 8% to 11% target and beating earnings consistently.
AMP— Ameriprise has compounded earnings at 17% for 10 years yet trades at just 11x earnings, with aggressive buybacks reducing share count by 60% since IPO.
RJF— Raymond James has compounded at 17% annually for 40 years since 1986 IPO but remains undervalued relative to its consistent growth record.

Bearish

JPM— JPMorgan trading at expensive 15x earnings and 3x tangible book value with management selling stock and complaining about buyback prices.
MORTINS— Mortgage insurers face headwinds from home price volatility, high interest rates, and rising inventories in COVID boom real estate towns.
OWL— Blue Owl faces credibility issues with aggressive lending, questionable loan valuations, and market skepticism about their liquidity claims.

Not investment advice.